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These are the numbers we have been waiting for. This week the Department of Health and Human Services (HHS) published a report revealing what insurers will be allowed to charge in the largest cities in 36 states, when selling policies Americans buying their own coverage in the state “Exchanges.” The report also shows the size of the subsidies that Exchange shoppers will receive. Previously, we had hard numbers for only 14 states.

In addition, HHS announced averaged premiums, state-wide, for Bronze and Silver plans in those 36 states. (We will be getting more information on rates in other cities very soon.)

Fear-mongers should blush.

It turns out that, on average, rates are 16% below the Congressional Budget Office’s projection—and that is BEFORE factoring in the subsidies.

I found what the report has to say about premiums in Texas particularly interesting. Many observers had suggested that while rates in the Blue States might be surprisingly low, Red States would let carriers charge far more.

Under the Affordable Care Act, Americans who are not offered “affordable” insurance at work can purchase coverage in the ACA’s health insurance exchanges, where many will be eligible for generous subsidies.

The law defines “affordable” as insurance that costs less than 9.6 percent of income. But the ACA doesn’t specify whether it is referring to individual coverage or family coverage, which is always far more expensive. The wording is ambiguous, an “oversight,” say many legislators.

Now the Internal Revenue Service (IRS) has ruled that the government will look at the cost of coverage for an individual – not a family – when deciding if a plan is “affordable.”

A disaster for Obamacare?

Forbes’ take plays right into the conservative claim that Obamacare is a disaster. “We are now entering the crucial phase of the law’s enactment,” crows blogger Dwight L. Schwab, “and many critics are saying, ‘I told you so.’”

Whoa! Let’s look at Forbes’ argument, and the numbers.

Fear-mongering vs. facts

Forbes observes that, according to the Kaiser Family Foundation’s 2012 survey of employee benefits, on average, workers contribute $951 annually for an individual plan. But those buying family coverage fork over $4,316, “a number well in excess of the 9.5% of earnings for someone making just $35,000 a year.” Yet, under the IRS decision, “only the portion of the contribution attributable to the individual employee” can be “considered for the purpose of determining what is affordable – not the entire contribution.”

Forbes’ contributor Rick Ungar offers an example: If an employee who earns $35,000 and “is the sole breadwinner in the family” pays less than $3,325 annually for his own insurance … “nobody in the family qualifies for participation on the healthcare exchanges and nobody can qualify for the intended government subsidies.” If the employee signs up for a family plan with his employer it would cost “over 12 percent of their annual income … a crushing amount.”

“The result,” Ungar says, “will be millions of spouses and children left to go uninsured.”

Millions uninsured???

Let’s begin with that last sentence. Just how many children would be shut out? Bruce Lesley, president of First Focus, a children’s advocacy group, estimates that 500,000 children could remain uninsured.

But what about the mothers? If 500,000 children might be affected, that means that, at most, 500,000 mothers would be left uninsured. But in most of these cases, parents may well have have two children, sometimes more. Let’s assume that, on average, they have two children. That means 250,000 mothers (half of 500,000) might find themselves uninsured because of the IRS rule. Add those 250,000 mothers to a maximum of 500,000 children, and 750,000 people wind up “going naked” as insurers put it.

Married couples who don’t have children also should be counted. If only one spouse works, and they cannot afford the family plan his employer offers, another adult could be left out. But, these days, few married women under 65 who don’t have children stay at home. We’re still far from “millions.”

Note: The post originally appeared on Healthinsurance.org To find the answer to that question, and why the Forbes Op-ed represents “fear-mongering, pure and simple”, please clickhere. If you like, come back here to comment.

Even high-income families will save: thanks to rules that limit co-pays, and reward providers for becoming more efficient, “those earning $100,000 to $250,000” will spend $779 less on medical care.” But these are “averages.” They don’t tell you whether your health care costs will rise or fall.

The answer will depend on: your income, your age, your gender, who you work for, what state you live in, whether a past illness or injury has been labeled a “pre-existing condition,” and what type of insurance you have now:

Moreover, he will find insurance less expensive. Today, small businesses pay 18% more than large companies because the administrative costs of hand-selling plans to small groups are sky-high. But starting in 2014 businesses with fewer than 100 employees will begin buying insurance in “Exchanges” where they will become part of a large group, and eligible for lower rates.

President Obama is clear: if we want to strengthen the economy, we can no longer afford President Bush’s tax cuts for the wealthiest 2% of all Americans. At the same time, he is equally firm that he will continue tax relief for the other 98%.

House Speaker John Boehner has responded by characterizing Obama’s proposal as coming from “La-la land.” Once again, Boehner has insisted that his party will not agree to let marginal tax rates for Americans earning over $200,000 ($250,000 for couples ) rise back to where they were in the 1990s.

“We Are Not Living Longer”

On the face of it, lifting the eligibility age for Medicare might sound like a reasonable idea. After all, longevity has increased. Can’t we wait a couple of years before we ask the government to cover our health benefits?

First, “We” are not living longer. “Some of us” are living longer. But low-income and median-income Americans (who most need these benefits) die sooner than the politicians who propose that we raise the age requirement for Medicare.

Research from the Social Security administration shows that increases in life expectancy have not been shared. In 1977, life expectancy at age 65 for a man who was in the bottom half of earners during his peak earning years was 79.8 years; a 65 year-old male who was in the top half of earners at the same point in his career, could assume that he would live roughly 10 years longer, to 80.5

Finally, occupation helps determine how long you live. Low-income workers are more likely to be engaged in work that is physically grueling. By age 65, the body is wearing out. At that point, a person needs Medicare.

As a simple matter of fairness, asking those who have worked harder to wait another two years before receiving Medicare seems cruel.

The Bogus Financial Argument

Admittedly Republicans might not acknowledge the “fairness” argument. If you believe that a person’s health is a matter of “personal responsibility,” you might say that if the poor are aging faster than the rest of us, it is because they smoke, eat too many carbs, and generally “don’t take care of themselves.”

But, fairness aside, when you look at the numbers, it turns out that the claim that we can save billions by requiring that everyone wait until 67 before applying for Medicare is bogus.Continue reading →

Obamacare will “keep unemployment high,” Tanner claims, because under reform legislation, businesses that have at least 50 employees working over 30 hours a week are expected to offer their workers affordable health insurance. If they choose not to, and more than 30 of their employees qualify for government subsidies to help them purchase their own coverage, the employer must pay a penalty of $3,000 for each worker who receives a subsidy— up to a maximum of $2,000 times the number of the company’s full-time employee minus 30. (The Kaiser Family Foundation offers an excellent graphic explaining the rule.)

Below, a guest post from Stephen Reid, Managing Partner at Pharmspective, a market research firm that provides advisory services to healthcare and pharmaceutical companies on strategic issues including the Affordable Care Act. (ACA)

I don’t agree with Reid on every point. (For example, if Republicans take both the White House and the Senate, I believe that they could and would eliminate both the premium subsidies that will make insurance affordable for middle-class Americans and the mandate.) Nevertheless, when he sent his Op-ed to me I was impressed by how well he understands the legislation. A great many moderates have been confused by the arguments coming at them both from the left and from the right. A combination of misinformation, half-truths and fear-mongering has created so much “noise” that it has become extremely difficult to separate fact from fiction.

By contrast, Reid does a very good job of explaining the reasoning behind the Affordable Care Act, and how its “checks and balances” work. I agree with him that the legislation is far from perfect, but it represents a good beginning.

There is just one major aspect of reform that I think Reid doesn’t understand: the rationale for expanding Medicaid. See my note at the end of his post.

A Centrist Perspective: Makers, Takers and Obamacare

by Stephen Reid

With a few days left before we elect a president, the prevailing belief is that an Obama win would propel the Affordable Care Act (ACA) forward with little delay and a Romney win would kill it. Both parties have gone to great lengths to characterize healthcare reform; the Democrats tout the legislation as essential to addressing a broken healthcare system that results in the U.S. spending twice as much as most developed countries on healthcare while leaving 50 million people without coverage; the Republicans cite the ACA as an example of hopeless dependency on government and contrary to free-market principles and individual rights.

“Competition drives improvements in efficiency and effectiveness, offering consumers higher quality goods and services at lower cost. It can have the same effect in the health care system, if given the chance to work.”– Mitt Romney

Creating “robust competition” is at the core of Mitt Romney’s approach to Health Care Reform. He would be right–if health care were commodity like any other.In many industries when more sellers compete for customers, prices come down. Think of thin-screen TVs. But the healthcare market is not like other markets, as a great many health care economists have explained.

When it comes to medical care, the consumer does not have the leverage that he enjoys in other markets because there is too much uncertainty about a) what he needs, and b) the value of what is, in the end, a very complicated product.

First, consider his needs: Should he purchase an expensive, comprehensive policy with no caps on annual or lifetime payouts? If he has a big family, he knows he needs a big car. But he has no way of knowing whether he, his spouse or one of his children will develop cancer, MS., Alzheimer’s or be in an accident that leaves one of them paralyzed for life. So there is no way that a savvy consumer can bring down insurance prices by shopping for the “least expensive policy that fits his needs.”

Despite the hullabaloo about the Affordable Care Act’s mandate that nearly everyone puchase heath insurance in 2014–or pay a penalty–the Congressional Budget Office estimates that only 1.4 percent of Americans will wind up paying the tax.

That is because the vast majority of us either have health insurance, or are exempted from the mandate for any one of a number of reasons. For example, at the end of 2014 you will owe no tax if:

your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income;

your income is below the income tax filing threshold, and so you’re not required to file taxes;

you were uninsured for less than three months of the year (If over three, the penalty is pro-rated);

And 11 million of that 18 million will be low-income or middle-income Americans who are eligible for a government subsidy to help cover the cost of their premiums. Chances are, most of them will take the government up on its offer.Continue reading →

Thursday, when Chief Justice Roberts explained that the Affordable Care Act (ACA) is constitutional because the “penalty” that some Americans will have to pay is, for all practical purposes, a “tax,” you could hear tea cups shattering from Billings to Boca Raton. In conservative and libertarian circles, the initial reaction was shock, but it didn’t take long for President Obama’s opponents to rally.

The word “tax” might as well have been a pistol shot at a horse race. In the blink of an eye, Obama’s opponents were off and running, megaphones in hand, blasting the president for lying to the American people while hiking taxes under the guise of healthcare reform. Presidential candidate Mitt Romney’s campaign then began providing regular Twitter updates on the campaign contributions it was raking in following the decision. Friday, it announced that it had collected $5.5 million.